Circular  of  Information,  No.  2. 


Pratt  Institute 
Thrift  Association 


ISSUED  BY 

PRATT  INSTITUTE,  BROOKLYN,  N.  Y. 

November,  1889. 


President: 


CHARLES  PRATT. 

Advisory  Council: 


Charles  Pratt, 

Charles  M.  Pratt,  ... 

H.  A.  Pratt, 

26  Broadway,  New  York. 

F.  B.  Pratt, 

232  Clinton  Ave.,  Brooklyn. 

John  Gibb, 

Hayden  W.  Wheeler, 

274  Washington  Ave.,  Brooklyn. 

Frank  L.  Babbott,  ... 

Solicitors  and  Counselors : 


Carter  & Ledyard,  . . . 

S.  C.  T.  Dodd, 

26  Broadway,  New  York. 

F.  B.  Pratt, 

Manager: 

Pratt  Institute 


Thrift  Association. 


The  object  of  the  Association  is  to  promote 
habits  of  thrift ; to  help  people,  especially  the  young, 
to  become  prudent  and  wise  in  the  use  of  money  and 
time,  by  offering  them  a safe  and  simple  method 
whereby  they  may  make  regular  monthly  payments 
for  the  purpose  of  saving  money,  or  of  accumulat- 
ing a fund  for  buying  or  building  their  own  homes; 
also,  to  loan  to  such  persons  as  may  want  to  borrow 
for  this  purpose;  and  to  do  all  such  things  as  expe- 
rience shall  prove  to  be  essential  to  the  accomplish- 
ment of  these  objects. 

The  responsibility  of  embarking  in  an  enterprise 
which  has  to  do  with  the  handling  of  other  people’s 
money  has  not  been  assumed  without  much  hesitation. 
But  in  the  scheme  of  education  undertaken  by  Pratt 
Institute,  the  value  and  importance  of  instructing 
the  young  in  this  subject  of  thrift  leads  us  to  do  all 
we  can  to  encourage  them  in  habits  of  saving.  Ex- 
perience has  demonstrated  that  there  must  be  some 
motive  to  impel  persons  to  save  money  with  regular- 
ity ; therefore  our  effort  will  be  to  encourage  them  to 
save  their  first  dollar,  and  then  to  help  them  to  make 
the  one  dollar,  ten,  then  the  ten,  one  hundred,  and  so 
on,  by  offering  them  a safe  place  for  the  deposit  of 
their  savings,  at  a liberal  rate  of  interest. 


4 


Pratt  Institute  Thrift  Association . 


One  says : “ If  I receive  $500  per  year,  how 

much  can  I save  ? ” We  cannot  answer.  It  is  wise 
to  provide  something  for  the  contingency  of  sickness 
and  loss  of  employment  which  may  make  you  a non- 
producer. Every  honest  man  is  bound  to  live  within 
his  income.  Another  says : “ If  I receive  only  $4 

or  $5  per  week,  how  much  can  I save  ? ” Save  ten, 
twenty-five,  or  fifty  cents  a week,  but  save  something. 
The  amount  is  of  less  importance  than  that  you  put 
a part  of  your  earnings  aside,  at  regular  intervals. 
The  first  one  hundred  dollars  earned  and  saved  has 
started  many  a mechanic  and  merchant  on  the  road 
to  wealth.  Therefore,  begin  to  save  to-day,  and 
never  stop  until  you  are  obliged  to.  Your  money 
will  be  safe  if  deposited  with  “ The  Thrift,”  and  the 
habit  of  self-denial  will  be  formed.  The  boy  who 
learned  to  save  50  cents  per  week  while  he  was  get- 
ting $5,  can  easily  save  $3  per  week  when  he  gets 
$10,  or  $7  per  week  when  he  gets  $20;  but  it  will  not 
be  so  easy  for  a man  who  has  been  spending  his  full 
income  of  $20  per  week  to  reduce  his  expenses  to 
$13  per  week. 

Estimate  your  wealth  not  by  the  number  of  dollars 
you  have  in  bank,  but  by  your  power  to  live  a con- 
tented life  on  some  sum  less  than  your  income.  If 
your  wants  are  simple,  you  will  find  it  easier  to  supply 
them.  It  is  right  for  one  to  increase  his  expenses  to 
a degree  consistent  with  his  increase  of  income. 
Consequently,  be  just  to  yourself  and  to  your  family, 
and  “ Neither  a spendthrift  nor  a miser  be.” 

“ The  Thrift  ” is  designed  to  aid  in  the  work 
carried  on  at  Pratt  Institute,  but  it  is  not  con- 
ducted by  the  Institute,  nor  is  the  Institute  in  any 
way  responsible  for  it.  The  names  of  persons  finan- 
cially responsible  for  “ The  Thrift  ” will  be  furnished 
to  those  doing  business  with  it,  on  request. 


Pratt  Institute  Thrift  Association . 


5 


BENEFITS. 

1.  Any  person,  whether  connected  with  Pratt 
Institute  or  not,  is  entitled  to  the  benefits  of  the 
Association  upon  complying  with  the  regulations, 
with  the  understanding,  however,  that  the  manage- 
ment at  any  time  will  have  full  power  to  close  an 
account  without  giving  notice  or  reason,  by  refunding 
the  money  with  interest. 

2.  The  work  of  the  Association  divides  itself  into 
two  branches,  the  “ Investment  Branch,”  and  the 
“ Loan  Branch.” 


INVESTMENT  BRANCH. 

3.  The  first  practical  step  must  be  to  afford 
opportunities  for  persons  to  save  and  deposit  their 
money,  and  we  wish  to  offer  the  best  possible  induce- 
ments consistent  with  safety,  to  secure  method  and 
regularity  in  the  manner  of  saving.  The  intention 
is  to  allow  small  deposits,  so  that  no  one  need  be 
debarred  from  sharing  in  this  plan. 

4.  The  Investing  Shares  of  the  Association,  to 
which  no  liability  attaches,  are  $150.00,  payable  at 
the  rate  of  $1  per  month  for  ten  years.  The  monthly 
payments  on  each  share  amount  in  ten  years  to 
$120.00,  and  the  accumulated  interest  at  the  rate  of 
5 per  cent,  per  annum  to  $30,  making  $150  in  all; 
in  addition  to  which,  provided  the  installments  are 
regularly  paid,  each  share  at  the  end  of  the  ten  years 
will  be  entitled  to  a premium  of  $10  per  share 
more.  In  other  words,  a monthly  payment  of  $1 
will  amount,  with  interest  and  premium,  to  $160  at 
the  end  of  ten  years,  or  about  6 per  cent,  per  annum 
on  the  subscription  paid  to  the  Association. 


6 


Pratt  Institute  Thrift  Association . 


5.  Payments  draw  interest  from  the  first  day  of  the 
month  following  the  date  of  deposit.  Payments 
may  be  made  in  advance  from  time  to  time,  or  the 
number  of  shares  may  be  increased  if  desired.  A 
fine  of  two  cents  a share  per  month  will  be  charged 
on  overdue  payments. 

6.  Application  for  investment  must  be  made  on 
a blank  form  furnished  by  the  Association.  The  in- 
vestment fee  is  fifty  cents,  payable  with  the  applica- 
tion. 

7.  It  is  not  intended  to  offer  a high  rate  of 
interest  so  as  to  induce  the  deposit  here  of  funds 
already  invested  in  savings  banks  or  elsewhere,  but 
rather  to  encourage,  in  young  and  old,  the  habit  of 
regular,  systematic  economy  and  saving  in  small 
amounts. 

8.  $150.00  in  one  sum  pays  up  a share  in  full,  and 
when  this  payment  has  been  made  the  interest  is 
payable  half-yearly,  at  the  rate  of  4 per  cent,  per 
annum,  the  holder  being  entitled,  at  the  end  of  ten 
years,  to  the  same  premium  as  that  receivable  by 
persons  who  pay  for  their  shares  by  installments. 

9.  Shares  can  be  withdrawn  at  any  time;  and 
although  the  Association  may,  under  its  rules,  require 
one  month’s  notice,  it  hopes  to  be  able  to  repay  sub- 
scriptions on  demand,  and  without  notice.  No  inter- 
est will,  however,  be  allowed  on  shares  payable  by 
installments  if  they  be  withdrawn  within  two  years 
of  their  issue. 

10.  Shares  may  be  held  by  minors,  and  by  trustees 
and  guardians  on  behalf  of  others;  and  by  married 
women  in  their  own  names,  and  for  their  separate 
use,  and  they  may  sign  receipts  for  interest  and 
principal. 


Pratt  Institute  Thrift  Association . 


7 


TABLE  SHOWING  HOW  MONEY  MAY  BE  ACCUMULATED. 

ii.  One  share  at  $1.00  per  month,  involving  a 
saving  of  4c.  per  day  for  300  days,  amounts,  with 
interest  and  premium,  at  the  end  of  ten  years,  to 
$160.00. 


1 Share  at  $1.00  per  month,  about  4 cts.  a day,  to $ 160.00 


2 Shares 

“ 2.00 

ii 

" 8 

a 

ft 

320.00 

3 ‘ 

“ 3.00 

> t 

“ 12 

« 

tt 

“ 

480.00 

4 “ 

“ 4.00 

ft 

“ 16 

“ 

“ 

640.00 

5 « 

“ 5.00 

“ 

“ 20 

a 

tt 

« 

800.00 

6 “ 

“ 6.00 

“ 

« 24 

ii 

960.00 

7 “ 

“ 7.00 

“ 

“ 28 

“ 

“ 

“ ...  . 

1,120.00 

8 “ 

“ 8.00 

ti 

“ 32 

et 

ii 

1,280.00 

9 " 

“ 9.00 

tt 

“ 36 

“ 

ii 

1,440.00 

10  “ 

“ 10.00 

“ 

“ 40 

et 

ii 

1,600.00 

11  “ 

“11.00 

“ 

“ 44 

tt 

ii 

1,760.00 

12  “ 

“ 12.00 

“ 

“ 48 

“ 

“ 

“ 

1,920.00 

13  " 

‘ 13.00 

«■ 

“ 52 

it 

ft 

a 

2,080.00 

14  “ 

“ 14.00 

“ 

“ 56 

“ 

ti 

“ 

2,240.00 

15  “ 

“ 15.00 

“ 

“ 60 

“ 

<- 

“ 

2,400.00 

16  “ 

“ 16.00 

“ 

“ 64 

tt 

“ 

2,560.00 

17  “ 

“ 17.00 

“ 

“ 68 

“ 

ii 

2,720.00 

18  « 

“ 18.00 

“ 

“ 72 

“ 

« 

a 

2,880.00 

19  “ 

“ 19.00 

“ 

“ 76 

ii 

3,040.00 

20  “ 

“ 20.00 

“ 80 

“ 



3,200.00 

By  steady  perseverance  in  saving,  therefore,  every 
person,  however  limited  his  income,  may  make  some 
provision  for  the  future,  by  investing  in  “ The  Thrift.” 
In  addition  to  this,  that  which  we  estimate  to  be  of 
more  value  than  the  money,  is  the  growth  of  character 
which  is  developed  by  the  self-denial  and  personal 
sacrifice  required  in  making  this  saving. 

12.  The  foregoing  explains  the  manner  of  saving 
money  by  deposits  in  the  “ Investment  Branch.” 
Now  the  question  is,  How  can  we  use  this  money 
safely  so  as  to  produce  a rate  of  interest  that  will  be 
encouraging  to  those  who  save  it  ? It  is  proposed 
to  loan  it  to  persons  for  the  purchase  of  homes,  and 


8 


Pratt  Institute  Thrift  Association . 


to  have  the  loans  so  made  that  they  can  be  paid  in 
small  monthly  installments  in  place  of  rent,  so  that 
after  a term  of  years  the  home  will  belong  to  the 
member  taking  the  loan. 

This  part  of  the  enterprise  will  be  termed  the 

LOAN  BRANCH. 

13.  Sums  of  any  amount  will  be  loaned  for  the 
purchase  of  private  houses,  shops,  and  other  real 
property  in  Brooklyn,  but  it  is  the  special  object  of 
the  Association  to  encourage  the  purchase  of  dwell- 
ing-houses by  persons  for  their  own  occupation;  and 
all  applications  for  advances,  with  this  object  in  view, 
will  be  dealt  with  in  the  most  liberal  manner  consist- 
ent with  security. 

14.  The  Association  will  not  purchase  or  build 
houses,  but  simply  make  advances  for  this  purpose. 
The  amount  which  will  be  advanced  will  be  regulated 
according  to  the  valuation  of  the  property  by  the 
Association’s  officials;  and  of  this  value,  a tenth  part 
at  least  must  be  provided  in  advance  by  the  one 
wishing  to  obtain  a loan. 

15.  In  order  to  cover  the  cost  of  doing  the  busi- 
ness,— such  as  general  office  expenses,  searching 
records,  guaranteeing  titles,  &c.,  and  to  keep  the 
rate  of  interest  low,  as  well  as  to  establish  a perman- 
ent security  fund,  a commission  of  1 per  cent,  per 
annum  on  the  sum  advanced  will  be  charged,  which 
sum,  if  desired,  can  be  added  to  the  loan.  This  is 
based  on  the  experience  of  the  best  English  societies, 
though  we  shall  modify  these  charges  from  time  to 
time  as  our  own  experience  shall  justify. 

16.  The  option  will  always  remain  with  the 
borrower  to  pay  the  loan  in  full,  at  any  time,  if  he 
shall  prefer  to  do  so. 


Pratt  Institute  Thrift  Association . 


9 


17.  Loans  will  be  re-payable  by  monthly  install- 
ments, commencing  on  the  first  day  of  the  month 
following  the  date  of  the  mortgage,  or  in  any  other 
manner  that  may  be  arranged,  so  that  the  re-pay- 
ments shall  not  extend  over  twenty-one  years. 

18.  The  monthly  installments  are  to  totally  ex- 
tinguish principal  and  interest;  and  when  they  are 
all  paid  the  house  will  become  the  property  of  the 
borrower. 

19.  So  long  as  the  installments  are  paid  regularly r 
the  loan  cannot  be  disturbed;  but  the  borrower  can 
at  any  time  make  additional  payments  on  account  of 
the  advance,  and  thus  either  shorten  the  period  during 
which  the  installments  are  payable,  or  reduce  their 
future  amount ; or  the  mortgage  may  be  canceled  at 
any  time  by  paying  the  present  value  of  the  future 
installments. 

Table  showing  the  monthly  payments  required,  cost  of 
LOAN,  &.C.,  FOR  A LOAN  OF  $1,000.00, 

FOR  A PERIOD  OF  TEN  YEARS. 


Monthly  dues, 

Total  dues,  10  years, 

All  other  charges  $10  per  year. 

Total  cost  for  10  years, 

Amount  borrowed, 

Actual  cost  of  loan,  ./. 

“ “ “ per  year, .. 

“ “ “ percent... 


Interest  on  Loan  at 


5% 

s^% 

6% 

> 10.90 

$ 11.10 

$ 11.40 

1,308.00 

1,332.00 

1,368.00 

100.00 

100.00 

100.00 

1,408.00 

1,432.00 

1,468.00 

1,000.00 

1,000.00 

1,000.00 

408.00 

432.00 

468.00 

40.80 

43.20 

46.80 

4 

A 6 

20.  As  an  illustration  of  the  working  of  “ The 
Thrift,”  the  case  may  be  taken  of  a person  occupying 
a house  in  Brooklyn,  for  which  he  pays  a rental  of 
$300  per  year.  The  price  is  $3,000,  of  which  amount 
he  pays,  perhaps  $400,  and  obtains  $2,600  from  uThe 


IO 


Pratt  Institute  Thrift  Association . 


Thrift.”  If  the  advance  be  granted  for  fourteen  years 
at  6 per  cent,  interest,  the  payments  to  the  Association 
will  be  about  $30  per  month,  or  about  $360  per  year, 
inclusive  of  city,  county,  and  water  taxes,  insurance, 
and  commission.  By  selecting  a longer  period  for 
the  redemption  of  the  advance  these  payments  can 
be  reduced.  At  the  end  of  fourteen  years,  if  the 
installments  be  regularly  paid,  he  becomes  the  abso- 
lute owner  of  the  house,  while  as  a tenant  he  would 
have  paid  his  landlord  during  the  same  period  almost 
the  same  amount  of  money  without  becoming  the 
owner  of  a single  brick. 

21.  In  the  event  of  borrowers,  from  adverse  cir- 
cumstances, being  unable  to  keep  up  their  subscrip- 
tions, the  Association  has  power,  after  three  years7 
installments  have  been  paid,  to  suspend,  without 
fines,  all  further  payments  for  twelve  months. 

22.  Through  the  aid  of  the  Association,  therefore, 
any  person  may  become  the  owner  of  the  dwelling  house 
he  occupies  as  a tenant,  by  an  annual  payment,  for  a 
limited  period,  very  little  in  excess  of  the  regular  rent. 

23.  How  to  obtain  an  advance. — The  first  step 
to  be  taken,  after  a person  has  selected  a house,  and 
ascertained  the  price,  is  to  obtain  from  the  office  a 
Form  of  Proposal,  which  must  be  filled  out  according 
to  the  instructions  contained  therein.  The  property  is 
then  examined,  and  a report  made  to  the  Managers, 
by  whom  the  amount  which  can  be  wisely  advanced 
is  determined. 

24.  As  every  application  for  an  advance  is  con- 
sidered on  its  own  merits,  it  is  impossible  to  state  the 
amount  which  will  be  loaned,  or  to  fix  the  rate  of 
interest,  until  the  property  has  been  inspected  by  the 
Association’s  official ; but  in  all  cases,  applicants  will 
be  dealt  with  on  the  most  liberal  terms  consistent 
with  security. 


Pratt  Institute  Thrift  Association . 


1 1 


25.  The  firm  of  Charles  Pratt  & Co.  have 
executed  a bond  in  the  sum  of  $500,000  to  indemnify 
and  protect  all  persons  having  financial  relations  with 
the  Association. 

26.  Rules  for  the  conduct  of  the  business  will  be 
adopted  and  modified  from  time  to  time  as  experience 
suggests. 

The  office  of  the  Association  will  be  open  on 
Monday,  Wednesday,  and  Friday  from  2:00  to  4:00, 
and  from  7:30  to  9:30  p.  m.,  and  at  such  other  times 
as  may  be  determined. 

Additional  information  will  be  furnished  by  mail 
or  upon  application  at  the  office. 

Address:  “ The  ThriktV’ 

Pratt  Institute, 

BROOKLYN,  N.  Y. 


215  Ryerson  Street. 


Ill 


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05924218 


